According to a new report by the Wall Street Journal, the US Securities and Exchange Commission (SEC) is investigating whether Tesla CEO Elon Musk and his brother Kimbal Musk violated regulations banning insider trading.
The investigation began late last year after Musk and his brother sold $108 million worth of Tesla stock. The transaction was made the day before Elon Musk asked Twitter users whether to sell his 10% stake in the company – a question that sent Tesla’s stock price plummeting in the past few days. day after that.
Meanwhile, Kimbal Musk, who also has a seat on the Tesla board, sold 88,500 Tesla shares the day before Musk asked the question on Twitter. Insider trading regulations prohibit employees and members of the Board of Directors from trading on information that is not publicly available.
However, employees and board members can avoid this by trading in the time before the official trading session. In 2011, the WSJ reported that Kimbal Musk also used this method in the past to trade his shares. But last year’s November 5 transaction by the Musk brothers was not part of the scheme, as it came a day before Musk asked questions on Twitter about the Tesla stock sale.
The WSJ magazine reported that regulators are looking into whether Elon Musk told his brother about his intention to hold a Twitter vote about selling Tesla shares. Or Mr. Kimbal knew about this election and the stock before the price drop.
In recent times, Elon Musk has almost gone to war with the SEC, accusing it of putting him and the company into “baseless investigations”. He also accused the agency of ignoring its pledge to distribute $40 million in fines to Tesla shareholders under a settlement in 2018. Musk also alleged that the SEC leaked information about the meetings. federal investigation into Tesla without any concrete evidence.
This controversy stems from Elon Musk’s 2018 tweet about his intention to make Tesla a private company. After the tweet, the SEC Committee conducted an investigation into Mr. Musk’s tweet and concluded that Mr. Musk misled investors about his plan to take Tesla private.
In February 2019, the SEC continued to ask another court to rule Musk in contempt of court for sending an inaccurate tweet that violated the terms of his agreement with the court on the use of Twitter. In contrast, Mr. Musk also said that the SEC was trying to “unconstitutionally take power”. Finally, a federal court settled between the two sides.
The confrontation between the two sides is continuing this year when Musk recently said he was preparing to sue the SEC and stated, “I didn’t start the war, but I will end it.”
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